Bunnings sells on record yield at portfolio auction

A Bunnings Warehouse at Osborne Park in Perth sold on a record yield.

The sale of a Bunnings Warehouse in Perth and a Dan Murphy’s in suburban Melbourne – both on yields below 5% – capped two days of Burgess Rawson portfolio auctions in Melbourne and Sydney.

With the financial year drawing to a close, investors at Wednesday’s Melbourne auction grabbed almost $30 million worth of commercial property across three states.

A day earlier in Sydney, 18 properties totalling more than $40 million were sold, with a clearance rate of 84%.

The main attractions in Melbourne lived up to their billing, with a small-scale Bunnings Warehouse in Osborne Park, Western Australia, selling for $7.05 million. A Perth-based investor, bidding over the phone, secured the 1736sqm property leased to the Wesfarmers-owned hardware giant, on a record low yield of 4.65%.

Moments earlier a retail outlet leased to Dan Murphy’s at Forest Hill in Melbourne’s east sold for $6.325 million on a 4.67% yield.

A Dan Murphy's outlet at Forest Hill in Victoria sold for more than $6 million.

A Dan Murphy’s outlet at Forest Hill in Victoria sold for more than $6 million.

The liquor store was touted as one of the cheapest Dan Murphy’s ever to hit the market, with many of the Woolworths-owned outlets selling for upwards of $10 million.

Burgess Rawson director Graeme Watson says the property’s position at the heart of a bustling suburban hub sparked an influx of investor interest.

“Located in a focal position in the comprehensive Brentford Square shopping strip of 44 different businesses, the Dan Murphy’s neighbours a large Woolworths supermarket and other national brands such as CBA, Bakers Delight and KFC,” Watson says.

“During the campaign the property attracted over 150 enquiries, many from interstate and some from overseas.”

Negotiations are continuing for a Woolworths and BWS outlet in regional Kyabram.

Negotiations are continuing for a Woolworths and BWS outlet in regional Kyabram.

The auction’s biggest prize – a Woolworths supermarket and attached BWS liquor store in the regional Victorian town of Kyabram – was passed in at $18.1 million, with negotiations continuing post-auction and a sale expected in the coming days.

A newly-completed Shell Express service station in Keilor Park, Victoria, also sold on a sub-5% yield. Leased to Viva Energy for the next 15 years, it sold for $7.7 million on a yield of 4.97%.

A childcare centre in Deception Bay, Queensland, sold for $2.05 million on a 6.35% yield, however a cafe and restaurant attached to Hawthorn Football Club’s home ground at Mulgrave in Victoria was passed in after a vendor bid of $1.85 million.

Three New South Wales properties leased to New Holland, Rabobank and Coles Express sold prior to the Melbourne auction.

Burgess Rawson’s portfolio auctions racked up 289 sales worth $940 million throughout the financial year.